Hamilton School Board could sue former broker at heart of Bencivengo scandal

By Michael Macagnone, hamiltoninfocus.blogspot.com

Wednesday, June 12, 2013

Hamilton Board of Education, after signing a settlement with one of its former health insurers, could bring another of its insurers to court.

Board President Jeff Hewitson and Vice President Joe Malagrino issued a press release Tuesday saying they intend to introduce a motion to the board that would direct the board’s attorney to file a lawsuit against the current insurer, Amerihealth and former broker, Marliese Ljuba and her employer, Allen Associates to the extent that there are any damages since 2011.

“We need to exhaust all possibilities we have to recoup money for the district,” he said. “Not only for the board, the district and for the public at large.”

The board had AmeriHealth as its insurance carrier from 2011 to 2012, and Allen Associates served as the broker for that contract. Before that, the district had Horizon Blue Cross Blue Shield New Jersey as its insurance carrier. The board agreed to a settlement deal with Horizon in February, shortly after switching to the board’s new attorney, Joe Betley.

That deal releases the insurer and the former broker for the district, Allen and Associates from any civil liability in exchange for a $1.5 million payment for all claims related to Horizon’s policies with the district through 2011.

The settlement said the payment satisfies “any and all claims, whether known or unknown, the Board has or may have ... whether or not such individual or entity is a Party to this Settlement Agreement.”

Allen And Associates is also given a pass in the agreement. The district waived any further claims against the broker, its past and current employees and any subsidiaries to the extent that the broker was involved in Horizon’s policies. Allen remained the district’s insurance broker after 2011, when Horizon was dropped by the district.

In 2011, the district switched insurance carriers on recommendation from Allen Associates to AmeriHealth, for about $20 million. A year later, the district renewed the contract with AmeriHealth on the recommendation of a consultant, Maryland-based Insurance Buyer’s Council — paid a flat fee rather than a commission — for $19 million.

The school district’s insurance brokerage first became an issue last spring after the scandal surrounding former Hamilton Mayor John Bencivengo broke. Bencivengo was convicted last fall of taking $12,400 in bribes from the district’s insurance broker, Marliese Ljuba, in exchange for his influence with two members of the school board.

Ljuba, who was the government’s main witness against Bencivengo, said at trial she gave him the money to help preserve her lucrative brokerage with the school district, where she earned more than $600,000 yearly in commissions.

“I had a very lucrative contract with the school district and I did not want to lose that contract,” she said at trial.

She also testified she gave bribes and illegal campaign donations to other current and former board members, including the convicted middleman in the case, former Hamilton Township official Rob Warney.